Independent Thinker – Creator – Sensemaker

Innovation in/out the Castle ?

As member of the Innovation Team of our company, I try to stay up-to-date on innovation thinking and therefore I try to read +/- one innovation book per month. I also read other stuff, and if you’re interested in my readings, please check-out my GoodReads Shelf. I found that sharing the books one reads is a good way for connecting with people. Interested to hearing what you read.

As the title suggests, this book goes way beyond the idea-generation phase of your innovation efforts. It’s about making ideas happen, especially if you are an Innovation Leader responsible for innovation WITHIN an existing organization.

Many models have been tried, but most stay stuck in idea generation:

The innovation = ideas + motivation formula can generate thousands of small initiatives, but does not support projects requiring resources beyond a few people and their spare time.

The innovation = ideas + process model can efficiently crank out innovation after innovation, as long as each initiative is mostly a repeat of prior efforts

The books goes in great detail into the causes for tension between the “castle” (in the book referred to as the Performance Engine) and the Innovation Team.

Business organizations are not built for innovation; they are built for efficiency.

The authors also offer many solutions to solve this tension. The basic premise is that the Castle is organized for efficiency: to create as many as possible predictable processed and make them as efficient as possible. That’s where initiatives like Lean and Six Sigma found their origins.

An innovation initiative is any project that is new to you and has an uncertain outcome

Indeed, every innovation project is an experiment, always based on not-so-precise assumptions, and with continuous learning in order to change those assumptions in more precise decision foundations.

By definition, innovation is neither repeatable nor predictable. It is exactly the opposite—nonroutine and uncertain. An innovation initiative, even a major one, is just an experiment.

The castle loves planning (basically building upon the planning models of previous years), and comparing past actuals vs. plans. Innovation is fundamentally different, as it is about comparing current assumptions with future potential. The comparison also happens much more frequently in a rapid learning context. It’s exactly what the Castle hates.

This tension often leads to frustration with the innovation leaders. At first sight, the job of an innovation leader seems like a dream job. It is not. The aspiring leader has been set up to fail. He just doesn’t recognize it yet. In frustration, he goes a step further,fashioning himself a rebel and a subversive. He fearlessly, or maybe even recklessly, flaunts authority. One person against “the system” is an extraordinarily bad bet. Why is it that innovation leaders so often feel that their biggest enemy is not the competition but their own company? There is a simple answer. Organizations are not designed for innovation. Quite the contrary, they are designed for ongoing operations. Innovation and ongoing operations are always and inevitably in conflict.

But the break-all-of-the-rule

mantra

while understandable

and widely shared

is poison

First, innovation leaders need the Performance Engine. Most obviously, it is profits from the Performance Engine that pay for innovation. Innovation leaders, take note: antagonizing the Performance Engine is a really bad idea.

This is nothing more

than youthful fantasy

at work

Another eye-opener for me was that the innovation team must be distinct from the Performance Engine, but that the innovation team must be just as disciplined as the Performance Engine.

The authors also propose that the Innovation Leader is NOT part of the execution team. The execution of each innovation project is trusted to a “Dedicated Team” and “Shared Staff”. The shared staff comes from the Castle. And this is done for EACH individual innovation project !

The split of work between the two teams is based on the work relationships required for the innovation project: these work relationships have three essential dimensions—depth, power balance, and operating rhythm.

For the Dedicated Team, the authors have a very clear recommendation:

hire outsiders !

There is no more powerful antidote to organizational memory than outside hires. If you want to change the culture, change the people.

At least 1/4 of your Dedicated Team should be made of people from outside your organization. If not, you easily fall into the trap of the The Risk of Organizational Memory.

Experience is usually an asset for advancement within the Performance Engine, but it can be a liability for a Dedicated Team. Innovation initiatives are, by nature, deliberate departures from the past. The lessons of experience are therefore less relevant.

If everyone on the Dedicated Team has been shaped by the same lessons learned from the same victories and defeats inside the Performance Engine, then the collective instinct will be even harder to escape.

A couple of words as well on the role of the Executive Sponsor – correction – the Supervising Executive:

By the way, we have deliberately chosen the term supervising executive instead of the more commonly used term sponsor. We dislike sponsor because it makes the job sound easy or even trivial. A sponsor just provides occasional support. But the supervising executive has a critical job. Few innovation initiatives succeed without a deeply engaged one.

The supervising executive should not only be there when the yearly budget of the innovation team is approved. He should be deeply involved throughout the year to coach the team and help them overcome the tensions with the castle.

If not innovation initiatives are looked at as “second class”. In the overall picture the innovation budgets are a fraction of the budgets for technology renewal of the castle for example.

The importance of innovation

should not be based

on the size of the budget

but on the size of it’s potential

If not innovation will end up as 5 lines in your company strategy papers, CEO reports and Annual Reports. The innovation leader should NOT content himself with just a mention of the word innovation in these reports.

At the end of the book, the authors really make you re-check your assumptions by listing their

10 myths of innovation:

Myth 1: Innovation Is All About Ideas

Myth 2: The Great Leader Never Fails

Myth 3: Effective Innovation Leaders Are Subversives Fighting the System

The book also makes reference to some outdated books and consultants on innovation, that unfortunately are still used as the oracles in defining today’s modern innovation initiatives.

Chris Zook has recommended that companies take only small steps outside their existing business. Their conclusions, however, are based on studies of what organizations have accomplished in the past, not what organizations might deliver in the future. Their research is akin to someone studying all the aircraft built through the mid-1940s, collecting voluminous statistical data, and claiming, on the basis of all available evidence, that traveling faster than the speed of sound is impossible.

This is a great book on innovation. Doing away with a lot of the Bull Shiitake of Innovation.